Mortgage Refinance Calculator
Compare your current mortgage with a proposed refinance, including monthly payment savings, closing costs, break-even time, balances, and lifetime interest.
Compare your remaining mortgage with a proposed refinance.
Loan details
New payment: $1,842.26
- Current payment
- $2,025.62
- Monthly savings
- $183.36
- Simple break-even
- 33 months
- Cash to close
- $6,000.00
5-year comparison
- Net interest-and-cost savings
- $8,873.45
- Current remaining balance
- $271,686.49
- Proposed remaining balance
- $267,814.58
- Current remaining interest
- $307,686.45
- Proposed interest + closing costs
- $258,678.74
- Estimated lifetime savings
- $49,007.70
- Term change
- No change
Current vs. proposed
Annual loan comparison
Interest paid and ending balance by loan year. A dash indicates that loan has already ended.
| Year | Current mortgage | Proposed refinance | ||
|---|---|---|---|---|
| Interest | Ending balance | Interest | Ending balance | |
| 1 | $19,354.16 | $295,046.70 | $16,356.47 | $294,249.32 |
| 2 | $19,022.43 | $289,761.67 | $16,032.09 | $288,174.26 |
| 3 | $18,668.48 | $284,122.70 | $15,689.41 | $281,756.52 |
| 4 | $18,290.83 | $278,106.07 | $15,327.40 | $274,976.76 |
| 5 | $17,887.88 | $271,686.49 | $14,944.96 | $267,814.58 |
| 6 | $17,457.95 | $264,836.98 | $14,540.96 | $260,248.39 |
| 7 | $16,999.23 | $257,528.75 | $14,114.17 | $252,255.40 |
| 8 | $16,509.78 | $249,731.08 | $13,663.30 | $243,811.56 |
| 9 | $15,987.56 | $241,411.18 | $13,187.00 | $234,891.41 |
| 10 | $15,430.36 | $232,534.08 | $12,683.83 | $225,468.09 |
| 11 | $14,835.84 | $223,062.46 | $12,152.29 | $215,513.23 |
| 12 | $14,201.51 | $212,956.52 | $11,590.75 | $204,996.83 |
| 13 | $13,524.70 | $202,173.75 | $10,997.55 | $193,887.23 |
| 14 | $12,802.56 | $190,668.85 | $10,370.88 | $182,150.95 |
| 15 | $12,032.05 | $178,393.45 | $9,708.86 | $169,752.66 |
| 16 | $11,209.94 | $165,295.93 | $9,009.50 | $156,655.01 |
| 17 | $10,332.78 | $151,321.25 | $8,270.69 | $142,818.55 |
| 18 | $9,396.87 | $136,410.66 | $7,490.20 | $128,201.60 |
| 19 | $8,398.28 | $120,501.49 | $6,665.69 | $112,760.14 |
| 20 | $7,332.81 | $103,526.84 | $5,794.67 | $96,447.66 |
| 21 | $6,195.99 | $85,415.37 | $4,874.52 | $79,215.03 |
| 22 | $4,983.03 | $66,090.94 | $3,902.46 | $61,010.35 |
| 23 | $3,688.84 | $45,472.32 | $2,875.58 | $41,778.77 |
| 24 | $2,307.97 | $23,472.83 | $1,790.76 | $21,462.39 |
| 25 | $834.62 | $0.00 | $644.76 | $0.00 |
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What does the Mortgage Refinance Calculator calculate?
The Mortgage Refinance Calculator converts the values you enter into a structured estimate using the formulas and assumptions documented on this page. Use the result to compare scenarios, review the calculation details, and identify sensitive inputs. Check the guide and formula sections before using the estimate for an important decision.
Refinance Calculator at a Glance
- Compares the remaining payment schedule on an existing fixed-rate mortgage with a proposed refinance.
- Estimates monthly principal-and-interest savings and a simple closing-cost break-even month.
- Handles upfront or financed closing costs, cash out, different terms and a user-selected comparison horizon.
- Shows current and proposed balances, interest, annual amortization and estimated lifetime borrowing-cost differences.
History
Mortgage refinancing became more practical as long-term, fully amortizing home loans replaced many of the short-term balloon mortgages common in the United States before the 1930s. Once a mortgage used regular principal-and-interest payments, borrowers could compare an existing payment schedule with a replacement loan using the same annuity and amortization mathematics.
Early comparisons relied on printed payment tables and manual break-even arithmetic. A modern mortgage refinance calculator can rebuild both schedules month by month, count closing costs once, and compare balances at the same future date. That broader view matters because a lower payment can come from a lower rate, a longer term, a larger balance, or some combination of all three.
What Does This Refinance Calculator Do?
This calculator estimates how a proposed fixed-rate refinance compares with the remaining schedule on a current fixed-rate mortgage. It calculates both monthly principal-and-interest payments, payment savings, a simple break-even month, interest through the selected horizon, remaining balances and estimated lifetime borrowing cost.
It also models cash out and financed closing costs. Cash out increases the proposed principal because it is additional borrowed money. Financed closing costs also increase principal and generate interest, while costs paid upfront appear as estimated cash to close.
Who Should Use It?
The calculator is designed for homeowners comparing a current mortgage with one or more refinance offers. It can help borrowers considering a lower rate, a shorter payoff period, a longer term for cash-flow relief, financed costs or a cash-out refinance.
Housing counselors, real estate professionals and financial educators can also use it to explain why the payment, break-even point, remaining balance and lifetime cost should be reviewed together. It is not a replacement for a Loan Estimate, payoff statement, underwriting decision or personalized financial advice.
What Problems Does It Solve?
For “What Problems Does It Solve?,” the Refinance Calculator organizes the relevant inputs, applies the documented method, and shows a result that can be compared across scenarios. The points below identify the specific considerations and assumptions users should review before relying on the estimate.
- Payment uncertainty: estimates the difference between the current and proposed monthly principal-and-interest payments.
- Closing-cost recovery: estimates how many whole months of positive payment savings are needed to recover entered costs.
- Term confusion: shows whether the proposed loan shortens or extends the remaining repayment period.
- Balance blindness: compares the current and proposed mortgage balances at the same selected horizon.
- Financed-cost questions: shows how adding closing costs to the new balance affects payment and interest.
- Cash-out comparisons: separates additional borrowed proceeds from the cost comparison while including the interest charged on that larger balance.
- Lifetime tradeoffs: identifies cases where a lower payment still creates more total borrowing cost.
Key Benefits
The calculator keeps every major assumption visible. You control the current balance, current rate, remaining term, proposed rate, new term, closing costs, cash out, cost-financing choice and comparison horizon. That makes each result easier to reproduce and each lender scenario easier to compare.
It also goes beyond a basic refinance break-even calculator. The simple break-even point is useful for screening, but the horizon and lifetime views show whether principal falls faster, whether the loan remains outstanding longer, and whether lower near-term payments create a larger long-term cost.
Mortgage Refinance Definitions
- Current balance
- The unpaid mortgage principal used to build the remaining current-loan schedule. It is not necessarily the same as an official payoff amount.
- Note rate
- The annual interest rate used in the monthly payment formula. It is different from APR, which includes certain loan costs.
- Remaining term
- The years and months still scheduled on the current mortgage, not the original term.
- Proposed principal
- The current balance plus entered cash out and any closing costs selected for financing.
- Closing costs
- The lender and third-party costs entered for the proposed refinance, after accounting for any credits you intend to include in the comparison.
- Cash out
- Additional money borrowed above the amount needed to replace the existing balance.
- Break-even month
- The first whole month when cumulative positive payment savings equal or exceed entered closing costs.
- Comparison horizon
- The future period over which current and proposed interest and balances are compared.
- Amortization
- The monthly process that divides each payment into interest and principal while reducing the balance.
- Loan Estimate
- A standardized lender disclosure that helps borrowers compare the loan amount, rate, payment, closing costs and other terms of a mortgage offer.
When to Use It
Use the calculator when a lender provides a refinance scenario, when market rates change, when you want to shorten or extend the term, or when you are considering cash out. Run one scenario for every offer and keep the current-loan inputs and comparison horizon the same.
Use a horizon that reflects how long you realistically expect to keep the replacement loan. If you expect to sell or refinance again before the estimated break-even month, positive lifetime savings may not be relevant to your actual decision.
Before choosing an offer, compare official Loan Estimates. The Consumer Financial Protection Bureau's Loan Estimate explainer identifies the payment, closing-cost and comparison fields borrowers can review.
How the Refinance Calculation Works
The engine first calculates the current and proposed fixed monthly principal-and-interest payments: For a useful Refinance Calculator result, enter realistic values, compare relevant scenarios, check the calculation details, and review the definitions, assumptions, and limitations before using the estimate for an important decision.
M is monthly principal and interest, P is principal, i is the monthly note rate and n is the number of remaining monthly payments.
The proposed principal equals the current balance plus cash out and any financed closing costs. Monthly savings equal the current payment minus the proposed payment. When savings are positive, the calculator divides closing costs by monthly savings and rounds up to the next whole month.
Each amortization schedule then calculates monthly interest from the prior balance, applies the rest of the payment to principal and carries the new balance forward. The calculator sums interest through the selected horizon and displays both remaining balances at that same point. Review the complete refinance formula page for the variable definitions, worked calculation and model assumptions.
Frequently Asked Questions
What is the break-even point on a refinance?
The simple break-even point is the closing costs divided by the monthly principal-and-interest savings. It does not include taxes, investment returns, tax effects, or future changes in expenses. Review the Refinance Calculator assumptions before relying on this result for decisions.
Should closing costs be added to the new loan?
Financing closing costs reduces cash due at closing, but it increases the loan balance, monthly payment, and interest. Compare both choices with your Loan Estimates. Use realistic inputs and review the Refinance Calculator assumptions before relying on this result for decisions.
Can a lower payment still cost more overall?
Yes. Restarting with a longer term can lower the payment while increasing the years of interest. Compare lifetime borrowing cost and the remaining balance at your expected time in the home. Review the Refinance Calculator assumptions before relying on this result for decisions.
Does this calculator use APR?
No. Enter the fixed note interest rate. APR includes certain loan costs and is useful when comparing lender disclosures, but it is not the rate used in the standard monthly payment formula. Review the Refinance Calculator assumptions before relying on this result for decisions.
Are taxes and homeowners insurance included?
No. They are excluded because they may remain similar after refinancing and are not controlled by the lender. Compare any changed escrow, insurance, or mortgage-insurance amounts separately. Use realistic inputs and review the Refinance Calculator assumptions before relying on this result for decisions.
One Fun Fact About This Calculator
A refinance can show a lower payment, an 11-month break-even point and a higher lifetime cost at the same time. That is not a contradiction: restarting repayment over a longer term can improve monthly cash flow while adding more interest-bearing months. The horizon balance reveals how much principal remains after the apparent break-even.
Conclusion
A strong refinance comparison answers more than, "Will my payment go down?" Enter accurate current-loan information and a complete proposed offer, then review monthly savings, closing-cost break-even, term change, interest, remaining balances and lifetime cost together.
Use this refinance calculator to narrow and compare scenarios. Confirm the actual payoff amount, rate lock, mortgage insurance, escrow changes, fees, credits, cash to close and other terms with the lender and qualified professionals before proceeding.
Refinance Calculator Disclaimer
This calculator provides educational estimates, not financial, tax or legal advice, a loan approval or a lender disclosure. Actual payoff amounts, rates, costs and savings can differ because of timing, daily interest, fees, insurance, escrow and lender rules.